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Interest rates are creeping lower as the bond market absorbs Friday's jobs data. And, according to one technician, rates are headed a lot further down.

Earlier in the week, yields on the U.S. Treasury 10-year note were back up above 2.6 percent. But, after interest rate cuts from the European Central Bank on Thursday and the U.S. jobs report on Friday, the U.S. 10-year moved lower. Though nonfarm jobs grew as expected, the labor participation rate remains around its 36-year low. The market thus thinks it will take a while before the economy will roar, so interest rates may remain relatively low in the meantime.

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.Mark Newton, chief technical analyst at Greywolf Execution Partners, sees interest rates heading down from current levels along with a down move in equities.

"I like Treasurys here," Newton said. "You can't make too much of the move up over the last five days. If anything, I expect a bigger move to the downside over the next three or four months. It likely coincides with at least a minor pullback in stocks."

Newton predicts the U.S. 10-year yield will drop to 2.2 percent and, ultimately, near 2 percent before moving higher again. Looking at a short-term chart of the U.S. 10-year yields, Newton sees resistance in a downtrend line, currently around the 2.62 to 2.63 level. "If anything, rates have gotten short-term overbought within this downtrend," he said.

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.Another downtrend line has actually been in place for several years, according to Newton's longer-term charts. "This is something where 3 percent was a very strong level of resistance on the upside," Newton said. "The pattern since the middle part of last year is still very bearish in my view. You saw a quick move down to 2.40 and then a bounce. But, if anything, the larger trend still remains down."

The catalyst for another move down, according to Newton, will be a drop in the stock market. "Any sign of a stock market pullback," Newton said, and "you're going to see a flight back to safety and into Treasurys, not necessarily for yield but to avoid losing money in stocks. So, my thinking is yields pullback [to] near 2 ΒΌ, down to 2 percent before a bigger economic rally likely leads rates much higher in the years to come."

Taking the opposing view is portfolio manager Chad Morganlander of Stifel's Washington Crossing Advisors. A selloff in the euro and stronger U.S. growth will ultimately help move long-term U.S. rates higher, he believes.

"The U.S. economy, we believe, will continue to gain momentum over the next several quarters," Morganlander said. "GDP will be roughly about 4 percent in Q2 and then roughly run around 3 percent for the next several quarters. That will bode well for the overall economy but it also will give some pressure to the bond market where rates will start to go higher."

Morganlander projects the U.S 10-year to yield between 3 percent and 3.25 percent in the next 12 to 18 months. "It's going to be on the back of better-than-expected economic numbers and also the Eurozone taking care of their disinflationary pressure that they have currently," he said.

Since he sees the benchmark yield headed higher, Morganlander suggests borrowers get their loans now.

"If you're going to be sitting around waiting for a quarter of a point here or there, then it's fruitless," Morganlander added. "You would want to right now lock in a rate."

To see the full discussion on the U.S. 10-year, with Newton on the technicals and Morganlander on the fundamentals, watch the above video.

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